To do so, click the ‘Connect Wallet’ button in the upper right corner of the Anchor dashboard. The Terra Station wallet will be used to store your UST tokens. For this guide, we’re going to use Ethereum and a Ledger hardware wallet connected to MetaMask. The hardware wallet isn’t required, but is highly recommended. Unfortunately the Terra wallet we’ll use to deposit into Anchor Earn doesn’t support Trezor (yet?).
- In the bASSET tab you can also bond LUNA tokens to mint bLUNA.
- Select the necessary token and go to the Market tab on its page.
- In My Page tab you can track and claim all the rewards from staking ANC, adding ANC and UST tokens to the liquidity pool, and borrowing UST.
- Anchor is a part of the Terra ecosystem, and it works with the Terra Station wallet.
- Even though the system can generate over 20% in returns, by fixing it at 20%, Anchor ensures a dependable and stable yield.
Following the installation of the extension/app, you must either create a new Terra wallet or import an existing one from a seed phrase. Anchor Earn only allows deposits of Terra’s native stable coin UST (for now). You can get native UST from a few oddball exchanges like Kucoin, Binance.com, OKex, OkCoin, Huboi, Gate.io, Bitfinix, Phemex and Transak. Connect your ETH compatible wallet, convert ETH to bonded ETH, and send bETH tokens to your Terra wallet address. After purchasing tokens, you need to transfer them to your wallet. Open the extension and copy the wallet address by clicking on it.
The ultimate guide to your first steps
This can happen when the value of the collateral falls below the value of the loan. This is common to all DeFi platforms so the recommended borrow usage ratio is 75% or even lower. Staking rewards earned on bLUNA or bETH by borrowers are liquidated by the protocol into UST for depositors, allowing them to earn target yield up to 20 %. The UST will be deposited into Anchor Protocol once you have confirmed the transaction on your Terra Station wallet. When the transaction is completed, your UST tokens will now be earning interest on Anchor Protocol. Now in the Borrow tab you can check the indicators showing the value of your collateral, borrowed value and Net APR.
The Terra Station extension will then launch and ask you to sign in. After that, your wallet will connect to the Anchor protocol. You should receive the UST tokens in your Terra Station wallet once the withdrawal from the exchange has been processed.
In the bASSET tab you can also claim staking rewards from minted bAssets that have not been provided as collateral, as well as withdraw LUNA tokens after unbonding. The first step is to purchase UST tokens on a platform that supports LUNA network withdrawals. UST tokens are traded on centralized (CEX) and decentralized (DEX) cryptocurrency exchanges. The CoinMarketCap website has a list of all available exchanges that support UST.
- In the ANC Governance tab enter the amount of ANC you wish to stake, click Stake and confirm the transaction in the Terra Station extension window.
- At the time of writing this article, the total value locked in the Anchor protocol is more than 10 billion UST.
- Let’s get acquainted with the main functions of the platform.
- Here, you can also exchange UST for LUNA, as well as all other tokens from the Terra ecosystem.
Enter the amount of LUNA for bonding, click the Mint button and confirm the transaction in the Terra Station extension window. Here you can see that bLUNA and bETH are the bonded assets that can be used as collateral. The Earn tab has a convenient calculator where you can check the approximate income on your deposit for a year, month, week, and day in aUST tokens.
Everstake is a responsible validator trusted by 625k+ users across 70+ blockchain networks. Since its launch, Anchor has witnessed immense growth and adoption. At the time of writing this article, the total value locked in the Anchor protocol is more than 10 billion UST. Users can check the Anchor dashboard to get all the latest information and data about the protocol. The next step is to link your Terra Station wallet to Anchor Protocol.
Go to the Anchor web app and choose the Earn tab to deposit UST tokens. Because each transaction has a Tx fee, you should keep some UST tokens in your wallet to cover the fee costs. For example, if you have 500 tokens in your wallet, deposit 495 to ensure that you have enough to cover the fees. If you installed the Google Chrome/Brave Extension click ‘Terra Station Wallet’ as the option to connect your wallet.
How to Earn Fixed Interest (20%) on UST Using Anchor Protocol
Please note that Terra Station does not have a Memo function, so you will not need to deal with that. Then send the tokens purchased at the exchange to your address. Anchor protocol is an innovative saving product offering unprecedented APY on stablecoins, primarily UST but gradually including Ethereum-based stablecoins as well. Anchor’s structure ensures that the returns are stable and dependable. It is built on the Terra blockchain, which means better scalability and cheaper fees.
Go to any exchange you like and buy LUNA or UST tokens there. Anchor is a part of the Terra ecosystem, and it works with the Terra Station wallet. The first thing to do is to download and install the Terra Station Google Chrome extension, where you can store LUNA and UST tokens.
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When Net APR is a positive number, it means that ANC rewards distributed to borrowers are greater than the interest they pay for the loan. Аfter providing the collateral, a Borrow Usage indicator will appear on the page. The borrow limit and usage may fluctuate depending on the collateral value. For Anchor Protocol, borrowing is available only up to 95% borrow usage.
This means that users are rewarded for borrowing UST, and both lender and borrower can earn using Anchor. Anchor protocol serves as a money market between lenders and borrowers of stablecoins. The lenders can deposit their stablecoins on the platform for borrowing and earn interest on them. The borrowers, in turn, can borrow these stablecoins by providing stakeable assets as collateral. These assets are regarded as bonded assets, and currently bLUNA and bETH are the bonded assets that can be used as collateral. The bonded assets are then locked up, and UST is borrowed against them at the borrow limit defined by the protocol.
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AUST is a token used for savings deposits on Anchor protocol. After depositing a certain amount of UST into Anchor, users automatically receive aUST tokens, which can then be used to generate income on the Anchor platform. Likewise, when you withdraw stablecoins from Anchor, you are actually trading aUST for UST.
Click on the Borrow button and set the borrow limit in the appeared window. After that, you will see the corresponding amount of UST that can be borrowed. Do not set the borrow limit too high to reduce the risks of collateral liquidation.
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After connecting your Terra Station wallet, navigate to the ‘Earn‘ tab on Anchor Protocol. Essentially what the bridge is doing is it’s burning the wUST on the Ethereum blockchain and then re-minting the UST on the Terra blockchain. When you view this transaction in Etherscan, it shows as your UST being sent to a black hole Again, don’t panic. ⚠️ In May 2022, the Terra blockchain suffered an attack knocking UST off peg and causing the price of LUNA to collapse below a penny. This page is no longer maintained but is kept for historical reference only.
The amount of aUST you receive will not be exactly the same as the UST you deposited because aUST is more valuable and continues to grow in value at 20% APY. You can find the current value of aUST at the top right of the Anchor Dashboard. However, UST on most exchanges is sold as wrapped UST (wUST) on Ethereum. You can buy wUST from CeFi exchanges like Coinbase Pro and Gemini, or you can use a DeFi Dex or Dex aggregator like curve.fi, Uniswap or 1inch. Once you have wUST, you can bridge it to your Terra wallet using the instructions below in Step 3.
How to transfer UST tokens to the Terra Station wallet
Another integral element of the Anchor protocol is the Anchor Token (ANC). Users have to deposit ANC to create governance polls and those who stake ANC can vote on those polls influencing the protocol’s future. It was designed to capture a portion of Anchor’s yield, allowing its value to scale linearly with Anchor’s assets under management. This means that ANC stakers receive protocol fees pro rata to their stake and benefit as adoption of Anchor increases. ANC tokens are also distributed as incentives to UST stablecoins borrowers proportionally to the amount borrowed. Anchor protocol has a total supply of 1 billion ANC tokens and 40% of that has been set aside as borrower incentives for the period of 4 years.
If the borrow usage reaches the maximum 100%, a portion of your collateral may be immediately liquidated to repay part of the loan. The next way to make money with Anchor Protocol is to borrow UST tokens providing bAssets as collateral. Currently, the yield on UST savings deposits reaches 20% per annum. Once you have funded your account, you can start using Anchor Protocol. Let’s get acquainted with the main functions of the platform.